House and Senate conferees failed yesterday to reach agreement on a bill to repeal the 10 percent withholding of taxes on dividend and interest income that was to h into effect July 1.
The conferees approved a package of tax incentives and tariff concessions proposed by aid friendly nations in the Caribbean basin and attached by the Senate to the withholding repeal bill, but thethe bill.
The conference broke up over toughened tax compliance provisions added to the bill at the insisteance Commitee Chairman Robert J. Dole (R-Kan.) Conferees from the House, which voted overwhelmingly in favor of repeal, said there was littlrt in the House for the compliance proposals.
"I don't know of one conferee who's impressed by this," said Committee Chairman Dan Rostenkowski (D-Ill.) "I don't see any enthusiasm on this side."
Repeal of withholding would cost the Treasury an estimated $13.4 billion over e years. The compliance measures, including "backup withholding" for taxpayers who fail to report dividend and stiffer penalties for banks that report inaccurate information, would save about $4.9 million of that.
Withholding did not begin July 1 because Treasury Secretary DonT. Regan, anticipating repeal, ordered a one-month deferral of enforcement.
Dole said it was his understanding that ihe compliance provisions would "persuade the president to sign this legislation," which he previously had threatened to veto. However, some members said they fee inclusion of the Caribbean Basin package is sufficient to deter Reagan from vetoing a repeal bill.
The corop a Senate-passed rider that would have expanded the president's power to retaliate against nations accused ices. Rep. Sam M. Gibbons (D-Fla.), chairman of the Ways and Means trade subcommittee, promised that he would te "trade reciprocity" bill to the floor in September.